Inovalon Holdings Inc

This is a special one-time coverage on Inovalon Holdings, a leading provider of data analytics and cloud-based platforms to the healthcare and insurance industries. The company’s platform has the ability to access, aggregate, normalize, and analyze real-time and on-demand patient-specific data from a number of disparate healthcare datasets and disparate connected healthcare systems. Inovalon is a critical component of a data-driven healthcare ecosystem and is known to leverage massive datasets that are expanding rapidly to deliver differentiated capabilities to its customers. It has been in the news recently for a potential acquisition by Stockholm-based private equity sponsor, Nordic Capital and this has led to a strong spike in its stock price. Inovalon has had a lower capex over the past few quarters and its expected free cash flows make it a strong PE acquisition candidate. Moreover, its modular design platform supports highly efficient innovation as well as ongoing expansion of their solution portfolio. We give the stock a ‘Buy’ rating.